Leviathan's Turbulent Resumption: Navigating Opportunities in a Shifting Gas Landscape

The shutdown of Israel's Leviathan gas field in June 2025 has sent shockwaves through regional energy markets, disrupting supply chains and reigniting debates over energy security in the Eastern Mediterranean. As geopolitical tensions with Iran complicate the field's restart, investors must reassess the strategic landscape for natural gas infrastructure and LNG exporters. With Egypt and Jordan scrambling to fill the gap, this crisis presents a rare opportunity to capitalize on resilient energy assets positioned to thrive amid supply disruptions.

The Leviathan Standstill: A Regional Crisis Unfolds

Leviathan, Israel's largest gas field, supplies roughly 40% of the country's domestic needs and 1 billion cubic feet per day (bcfd) to Egypt and Jordan. Its abrupt closure in early June—due to Iranian missile threats—has left Israel reliant on costlier diesel, while Egypt faces power outages and soaring LNG import costs. Jordan, which sources 61% of its electricity from imported gas, has activated emergency measures, including fuel oil switches and Egyptian LNG imports, to avoid grid collapse.

The shutdown's ripple effects are stark: Egypt's LNG imports surged 15% in June 2025, contributing to a 10% spike in global LNG prices since April. Meanwhile, Israel's domestic gas consumption, already up 7% year-over-year in 2024, now strains infrastructure as exports are curtailed.

Strategic Importance and Vulnerabilities

Egypt and Jordan are doubly vulnerable. Egypt's domestic gas production has declined by 20% since 2020, forcing reliance on imports. Its March 2025 LNG imports from Israel (0.9 billion cubic meters) underscore this dependency. The crisis has accelerated plans for a Floating Storage and Regasification Unit (FSRU) at Ain Sokhna port, aimed at diversifying supply—a project that could become a linchpin for regional stability.

Jordan's position is even more precarious. The 2016 gas agreement with Israel, valued at $10 billion, faces legal scrutiny under force majeure clauses. While Jordanian authorities have temporarily shifted to Egyptian LNG and heavy fuel oil, analysts warn that prolonged disruptions could trigger sovereign debt defaults or geopolitical fallout.

Risks of Prolonged Disruption

The Leviathan standoff highlights three critical risks:
1. Geopolitical Contagion: Attacks on energy infrastructure could spread, destabilizing other fields like Cyprus' Aphrodite or Egypt's Zohr.
2. Economic Spillover: Egypt's fertilizer industry—reliant on gas as feedstock—is already cutting production, risking food shortages.
3. Contractual Chaos: Jordan's legal challenges could set precedents for renegotiating energy agreements across the region.

Investment Opportunities in LNG and Infrastructure

Amid this turmoil, investors should focus on two themes: resilient LNG exporters and gas infrastructure plays that can mitigate supply risks.

1. LNG Exporters: Qatar and the U.S. Lead the Way

• Qatar Energy (Qatar): The world's top LNG exporter is expanding capacity to 126 million tons per year by 2027. Its diversification strategy, including long-term contracts with Asian buyers, shields it from regional instability.
• Cheniere Energy (LNG, U.S.): The U.S. LNG leader benefits from flexible spot markets and proximity to Europe. Its 2025 export volumes are up 18% year-over-year, and its stock price has outperformed peers amid supply shocks.

2. Gas Infrastructure: Building Resilience

• FSRU Operators: Companies like Golar LNG (GLNG) or Höegh LNG stand to profit from Egypt's FSRU deployment at Ain Sokhna. Such projects reduce reliance on pipeline gas and offer steady tolling revenue.
• Pipeline and Storage Firms: Williams Companies (WMB) and EnLink Midstream (ENLK) in the U.S., and regional players like Jordan's National Electric Power Company, are critical for rerouting gas flows and stabilizing supply chains.

Strategic Recommendations

• Immediate Plays: Allocate 10-15% of energy portfolios to Qatar Energy and Cheniere Energy. Both offer dividend stability and exposure to rising LNG demand.
• Infrastructure Bet: Invest in FSRU operators (GLNG) and pipeline firms (WMB) via ETFs like the Energy Infrastructure ETF (AMJ). These assets benefit from long-term contracts and regional reconfiguration.
• Risk Mitigation: Short-sell Israeli energy stocks (e.g., Delek Drilling) until Leviathan's restart is confirmed, as prolonged downtime could trigger asset write-downs.

Conclusion

The Leviathan crisis is a microcosm of global energy's fragility—and its opportunities. Investors who pivot to LNG resilience and infrastructure flexibility will position themselves to profit as markets recalibrate. While geopolitical risks persist, the demand for secure, scalable gas solutions has never been clearer. The next phase of the Eastern Mediterranean's energy story will be written by those who bet on adaptability in the face of uncertainty.